• Saturday, September 21, 2019
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Indians Are Worse Off Under BJP Rule

It is in less than a year since the highest court declared privacy as a fundamental right of the citizen that an order has been issued saying that citizens shall not have any secret to hide before the ‘country’. But then who is actually hiding information and serving the corporates? The contracts in Rafale arms deal, the economic frauds committed by banks after demonetization, the credibility of the funds that came to the Reserve Bank, information about the tax concessions granted to the corporates, data about kingpins of black money, enquirires about the people killed in fake encounters, reprsentation of Dalits and minorities in military and investigative agencies, and even definite information about prime minister’s educational qualification – so goes the long list of items of information which the government has been withholding on the plea that their disclosure would be against national interest. It is a government that misled even the Supreme Court on grounds of national security that is now snatching the fundamental rights of the citizens under the same pretext.

India’s Prime Minister Modi should spend less time abroad telling foreigners how well India is doing and more time at home asking people how they feel about his administration.

Because as Modi is heading to Davos, Switzerland, to address the annual meeting of the World Economic Forum this week, Indians think they are worse off than they were three years ago.

That’s according to a Gallup survey, which finds a big decline in the percentage of Indians who rate their lives positively enough to rate it as “thriving” since Modi assumed office.

The survey findings provide a different picture from that which one gets when looking at India’s financial markets. In fact, they have been soaring, up close to 50% in the last two years.

Table 1

Index/Fund 2-year Performance
Global X MSCI Pakistan (PAK) -7.30%
iShares S&P India 50 (INDY) 49.69%
Source: Finance.yahoo.com 1/20/18

Nonetheless, only 3% of Indians consider themselves thriving in 2017 compared to 14% in 2014 (see table 2 below).

“India’s largely rural population initially led the decline in life evaluations, with thriving dropping from 14% to 7% between 2014 and 2015, and edging even lower to 4% and 3% in the years after that,” according to Gallup. “Declines among urban Indians have been much more gradual, although they are down in the past year, dropping from 11% to 4%.”

Table 2

Metric 2014 2017
Indians Thriving 14% 3%
Unemployment rate 3.53% 4.80*
Monthly Wages for Low-Skilled Workers 13300INR 10300 INR
Living Wage Family 17300INR 17400INR
Per Capita GDP $1647 $1842**
*Q4 Forecast

**2016

Source: Tradingeconomics.com and Gallup News.

These findings may come as a surprise to some. Modi has maintained a stable political and macroeconomic environment, reformed the tax system, and fought corruption with demonetization. These policies have helped India’s economy outperform most emerging markets in per capita GDP growth, and improved the country’s business environment, as inflation has dropped.

That’s how India became the world’s fourth-fastest-growing economy in the world in 2017, according to the World Bank’s latest edition of Global Economic Prospects.

Meanwhile, international agencies have lifted India up in a number of global rankings. Like World Bank’s 2017 ranking of “ease of doing business,” where India climbed from the 130th position last year to the 100th position this year.

Still, Modi’s policies have yet to touch the masses. Living Wage Family in India remains almost flat in the 17300-17400 INR/Month range over his tenure. Meanwhile, wages paid to low-skilled labor decreased to 10300 INR/Month in 2017 from 13300 INR/Month in 2014 (see table 2).

Then there’s the persistence of corruption, the rise of nonperforming loans in state-owned banks, high taxation, poor public health, and chronic income inequality — something that Modi inherited from previous administrations (see The World Inequality Report 2018).

All these could explain the misalignment between the high hopes of the Indian people for their economy and what they are personally experiencing.

“The people had high expectations, and those expectations have not been satisfied. GDP growth is still above 5 percent, but it has slowed down sharply from past rates of 8 and 9 percent,” says Udayan Roy, an Economics Professor at LIU POST.

“And even the above-5 percent GDP growth is not creating jobs fast enough,” he continues. “There’s this phenomenon of ‘jobless growth.’ India is demographically quite a young nation. And the young people are entering the labor force at too fast a rate compared to job creation. So, these young people are getting frustrated.”

This week Modi joins other world leaders in setting the vision and the agenda for the global economy. That’s a great honor for India and Modi. But before setting the agenda for the world economy, he must set the agenda at home.
courtesy: forbes.com

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